News

CME: BSE Follow-Up

26 April 2012

US - Cattle futures were higher yesterday as market participants were reassured by the response of a number of
key trading partners who affirmed the new case of BSE will not
affect beef trade, write Steve Meyer and Len Steiner.

Also coverage of the issue in the media was
restrained and devoid of sensationalism. As the LFTB issue
showed, how the media approaches an issue has an significant
impact on the consumer response.

We can only hope that the
popular press opts for facts rather than sensationalism and, in
this case, it appears the former have prevailed. Also positive for
the cattle market is the sharp turnaround in the price of the beef
cutout, with the choice beef cutout closing last night at $190.5/
cwt., $13.8/cwt. or 8% higher than just two weeks ago.

The higher prices have in part come from packers cutting back on slaughter but also because the negative effect of the LFTB stories
seems to be waning. One sign of that is the recovery in the price
of fat beef trim, which is now trading in the mid 80c/lb. compared
to about 50 c/lb (or even less) in early April.